Green Mountain's shares jump on health brew

Investors welcome news of new health drinks line from Green Mountain, shares soar

Associated Press

Green Mountain Coffee Roasters Inc.'s shares jumped Friday as investors cheered its plans for a new line of health drinks.

THE SPARK: Green Mountain, which makes the Keurig single-serve coffee system and its related coffee pods, said Thursday that it will soon roll out a new line of health drinks. The coffee, tea and fruit drinks include antioxidants and vitamins are intended to appeal to today's more health-conscious consumer and diversify the company's line of products.

THE BIG PICTURE: Green Mountain made the move as the patent on its K-cup technology is set to expire. It faces intense competition from Starbucks and other coffee companies that are selling their own single-serve coffee products.

The company was once a market darling but a series of missteps, growing investor concern and intense competition have taken a toll on its share price.

THE ANALYSIS: Canaccord Genuity analyst Scott Van Winkle said that Green Mountain has had a rough ride this year with competition and accounting issues. However, he remains bullish on the company and expects several years of strong revenue and earnings growth as more households buy the Keurig single-cup coffee makers.

SHARE ACTION: Shares of the Waterbury, Vt.-based company jumped 12 percent to $27.54 in afternoon trading. Green Mountain's shares are still down 76 percent from their all-time high of $115.98 set Sept. 20 of last year.

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